Take 'FIVE' to get free money for your TSP account

By Janis El Shabazz, Air Force Personnel Center / Published May 16, 2014

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JOINT BASE SAN ANTONIO-RANDOLPH, Texas (AFNS) -- The Thrift Savings Plan has launched the "Take FIVE for Your Future" educational campaign encouraging civilian employees to take advantage of free government TSP matching contributions by putting at least 5 percent from each paycheck into their account.

"Employees who fail to do this are losing out on thousands of dollars that can help them down the road when they get ready to retire," said Carlos Colon, The Air Force Personnel Center benefits and entitlements technical oversight team lead.

The government provides matching contributions on the first 5 percent of pay contributed each pay period. All civilian employees automatically receive a government 1 percent contribution. The first 3 percent will be matched dollar-for-dollar; the next 2 percent will be matched at 50 cents on the dollar. If employees stop making regular employee contributions, the matching contributions will also stop.

The campaign which also includes a YouTube video highlights the plan's five core funds and five lifecycle funds available for employee investments.

For employees who are unsure which funds to select, the TSP offers lifecycle funds which automatically manage TSP contributions based on an employee's target retirement date. Each L fund is invested in a combination of the five individual TSP funds to maintain an optimal balance of investment risks and rewards for a particular time horizon.

Colon said a common reason for employees hesitating to make the 5 percent contribution stems from not understanding how TSP works or not wanting to part with the money from each paycheck.

"While wanting to keep the extra money each month is understandable," he said, "Employees should consider the impact that these contributions can have over the course of a career working for the government."

Colon said according to TSP, an employee earning $50,000 per year who contributes 5 percent to their TSP, about $95 per paycheck, and earns an average annual rate of return of 6 percent can potentially have a TSP account worth as much as $418,000 after 30 years.

"The old financial adage about 'paying yourself first' definitely applies to TSP contributions," Colon said. "The earlier you begin to save for your retirement, the easier it will be to weather short-term market fluctuations and gain the maximum savings benefit."

To learn more about the TSP "Take FIVE for Your Future" campaign, visit the TSP website.

Air Force civilians can make TSP elections through the Employee Benefits Information System.

For more information about other personnel issues, visit the myPers website. To access EBIS select the link under the 'I would like to' section. Log into the site with your social security number and EBIS personal identification number.

New users who do not have a PIN must click the 'new user' option to create one. Employees, who have forgotten their PIN can reset it by providing six pieces of previously established information. After answering the security questions select, the "forgot login" link and enter the requested information.